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The Corporate Objective

Andrew Keay, Professor of Corporate and Commercial Law, Centre for Business Law and Practice, School of Law, University of Leeds, UK and Professorial Research Fellow, Deakin University, Melbourne, Australia
The Corporate Objective addresses a question that has been subject to much debate: what should be the objective of public corporations? It examines the two dominant theories that address this issue, the shareholder primacy and stakeholder theories, and finds that both have serious shortcomings.
Extent: 360 pp
Hardback Price: $159.00 Web: $143.10
Publication Date: 2011
ISBN: 978 1 84844 771 4
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  • Law - Academic
  • Company and Insolvency Law
  • Corporate Law and Governance
The Corporate Objective addresses a question that has been subject to much debate: what should be the objective of public corporations? It examines the two dominant theories that address this issue, the shareholder primacy and stakeholder theories, and finds that both have serious shortcomings.

The book goes on to develop a new theory, called the Entity Maximisation and Sustainability Model. Under this model, directors are to endeavour to increase the overall long-run market value of the corporation as an entity. At the same time as maximising wealth, directors have to ensure that the corporation survives and is able to stay afloat and pursue the development of the corporation’s position. Andrew Keay seeks to explain and justify the model and discusses how the model is enforced, how investors fit into the model, how directors are to act and how profits are to be allocated.

Analysing in depth the existing theories which seek to explain the corporate objective, this book will appeal to academics in corporate law and corporate governance as well as law, finance, business ethics, organisational behaviour, management, economics, accounting and sociology. Postgraduate students in corporate law and corporate governance, directors, and government regulators will also find much to interest them in this study.
‘This book is an excellently constructed piece of legal writing which covers a topic of significant social and economic importance. It is a work of excellent analytical clarity and contains a vast amount of research and considerable detail. . . Academics in corporate law and corporate governance in addition to corporate social responsibility and company law generally will find much to interest them in this publication as will students who study in these areas, particularly postgraduates.’
– John Quiggin, Journal of Business Law

‘Andrew Keay’s The Corporate Objective is an important contribution to the long-standing debate on the scope of corporate law.’
– Mohamed F. Khimji, Canadian Business Law Journal

‘Although large public companies dominate the world, there is no unanimity as to their objective. Andrew Keay tackles this very important topic with skill and in considerable depth. . . Keay addresses some of the most important and complex issues of our time and is very creative in developing an innovative and promising theory. Widespread circulation of The Corporate Objective and discussion of the proposed EMS model would certainly move the debate well forward of where we stand today.’
– Corporate Governance

‘This incisive monograph comfortably finds its niche in the Corporations, Globalisation and the Law series. Its arrival is to be welcomed as a significant contribution to a long-standing debate in the literature on the purpose of a company. . . There is much to recommend for the corporate governance specialist. The style throughout is readable while staying firmly in the realm of theoretical debate as befits a monograph of this kind It is fair to conclude that this monograph is both excellent and timely. This book will doubtless fast gain a reputation as a stalwart of the corporate governance scholar in the United Kingdom for its effortless interrogation of relevant concepts and clear articulation of EMS as an alternative working model.’
– Deirdre Ahern, International Company and Commercial Law Review

‘This is legal scholarship of the finest kind, concerned with an issue of supreme political, economic and social importance. Professor Keay takes the debate on the object of the modern public corporation by the scruff of its neck and skilfully navigates between the Scylla and Charybdis of the shareholder/stakeholder debate. This book, characterised by admirable analytical clarity and a huge amount of research, faithfully summarises the debate hitherto, and propels us to the next stage with a powerful argument, which challenges, effectively, both the stakeholder and shareholder theories.’
– Harry Rajak, University of Sussex School of Law, UK
Contents: Preface 1. Public Companies: Context, Theory and Objectives 2. Shareholder Primacy 3. Stakeholder Theory 4. An Entity Maximisation and Sustainability Model 5. The Enforcement of the Entity Maximisation and Sustainability Model 6. Investors 7. Managerial Discretion and Accountability 8. Allocation of Profits 9. Epilogue Index